What is a bitcoin brokerage?
A bitcoin brokerage is a middleman for buying and selling bitcoin. In the same way that you’d use a bureau de change at an airport to exchange your currency to another, a brokerage is a company that will buy and sell bitcoin at a fixed price. Bitcoin brokerages are also the only option that allows you to buy a very large amount of bitcoin at a time (for instance if you want to invest £50,000 or more). We have all the information you need to understand bitcoin brokerages right here.
How do bitcoin brokerages work?
Bitcoin brokerages handle your bitcoin trades on your behalf. If you want to buy a certain amount of bitcoin they’ll have a set price at which you can buy. Once you make the payments, they’ll then transfer the coins straight to your bitcoin wallet. Often brokerages will also help you through any extra steps, such as setting up a wallet to store your bitcoins.
How do I use a bitcoin brokerage?
It’s simple. Just go to the brokerages site and it will have the current rate at which they’re selling bitcoin displayed. If you’re happy with the price then set up an account, select how much you want to buy, then enter your payment details and your wallet address and they’ll transfer you the coins.
What should I look for in a bitcoin brokerage?
Design and ease of use
The purpose of a brokerage is to make the process of buying bitcoin easier. You want to make sure the site is designed in such a way as to make it as simple as possible for you to navigate through and make your purchase.
Different brokerages will charge a different amount for buying bitcoin, as any commission charged by a platform will be included in the price listed. To find the best rate it’s a good idea to compare multiple brokerages.
You want to make sure you’re getting a good deal on your purchase. Depending on the platform and your chosen payment method, there will often be fees of 1% to 5% of the purchase amount, with credit card being the most expensive option.
As bitcoin brokerages aren’t officially regulated, the reputation of a site is a good indicator of how reliable they are. You will want to be sure you are sending your money to a company that will not disappear with your cash. There are many platforms that have been around for a while and have good reputations. Some of the common options you should consider include eToro and Coinmama.
Variety of coins
If you want to buy more than just bitcoin, you can find brokerages with a range of cryptos. Brokerages will usually offer all the top coins, and will often be more than happy to assist you in buying any coin you want if you give them a call.
Do I have to verify my identity?
Yes, you have to verify your identity to register with a bitcoin brokerage. Usually you’ll have to provide proof of your ID (such as a passport and a driving license) and address (such as a utility bill or bank statement). Typically you’ll have to provide a selfie of you holding your photo ID to prove it’s yours.
So what’s the difference between a bitcoin brokerage and an exchange?
On a Bitcoin exchange you buy bitcoin directly from other people, whereas with a brokerage you’re buying them from the platform. Exchanges are much more complicated to use as they have cryptocurrency price charts and constantly refreshing order lists. A brokerage handles the whole process for you and provides a fixed price. It’s like having a travel agent book your holiday instead of doing all of it yourself.
Do bitcoin brokerages charge commission or fees for buying bitcoin?
Yes, but these are included in the price displayed. The price advertised is the pace you pay, without any percentage commission being added when you’re entering your details. The only additional fees will be if a platform charges a fee for specific payment methods (e.g. credit cards).
How long do transfers take?
This depends on the brokerage you use and how busy the Bitcoin blockchain is at that point. But usually once you have transferred the money your bitcoins will be with you immediately or within a few hours.
Can I buy multiple cryptocurrencies through a bitcoin brokerage?
Yes, most brokerages sell a variety of cryptocurrencies, including the major coins such as Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple. The advantage of using an expert brokerage is that they can usually find a way to get you any coin you want.
Do I need a wallet to use a bitcoin brokerage?
Yes, to use a brokerage you will need a wallet to which they can send your coins. A few, such as Coinbse, have wallets integrated onto their platform to hold bitcoins in your account, but the majority will require you to provide a wallet address to deliver the bitcoins to. Brokerages will also commonly offer to set up your wallet for you if you’d rather have it done by someone more experienced with cryptocurrency.
What are the advantages of using a bitcoin brokerage?
The main advantage of brokerages is that they make the process of buying bitcoin easier. You don’t have to understand how trading pairs work or be able to read financial charts in order to buy bitcoin. They take away all the hassle of having to deal with an exchange, and you also benefit from reliable prices, as the price quoted with a brokerage includes any commission they charge.
And what are the drawbacks?
It tends to be more expensive to buy bitcoin from a brokerage as opposed to an exchange.This is because the price you pay for your coins includes any commission the brokerage charges. Brokerage transactions also tend to be slower than on exchanges and CFD platforms, especially considering that the transfer is often done manually upon approval. Brokerages also don’t have to be regulated, so make sure you’re using a reliable platform (you’ll find many of these through our reviews).
Should I use a bitcoin brokerage?
Well, it depends. If you’re willing to pay slightly more for your bitcoins in order to make the process of getting them more hassle free, then a brokerage is a good option. If you have little to no experience with cryptocurrencies, then brokerages make the whole process easy and are a great way to invest in cryptocurrency.
Where can I find the best bitcoin brokerages?
Right here. We have reviewed all the best and most reliable brokerages out there to help you find the right one for you. Have a read through our reviews and see what you think of the individual options.